[Click eStock] "BGF Retail's Growth Potential Increases with ESG"

Yuanta Securities "Target Price 200,000 KRW, Maintain 'Buy' Rating"
Industry's Best Franchisee Support Policy... "Advantageous Amid Convenience Store Industry Restructuring"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] An analysis has emerged that BGF Retail is enhancing its competitiveness through win-win cooperation with franchise owners. It is expected that this will enable both quantitative and qualitative growth amid the restructuring of the convenience store industry.

On the 5th, Yuanta Securities maintained a target price of 200,000 KRW and a 'Buy' investment rating for BGF Retail. Lee Jin-hyeop, a researcher at Yuanta Securities, interprets that BGF Retail's ESG (Environmental, Social, and Governance) initiatives are sustaining the target price.

BGF Retail currently has one of the industry's highest-level franchisee win-win support policies, making it highly likely to be chosen by store owners. As the number of contract renewals increases until 2022 amid the restructuring of the convenience store industry, this researcher expects BGF Retail's win-win capabilities to shine. BGF Retail operates various support measures, ranging from electricity bill and product disposal support that help store operations to support for franchisees' family events and legal assistance. When the minimum wage was raised by 16.4% year-on-year to 7,530 KRW per hour in 2018, BGF Retail also launched a franchisee lifecycle management program. The cost of the program is about 80 to 90 billion KRW annually, totaling up to 450 billion KRW over five years. The researcher predicted, "The increase in consumer choice due to win-win cooperation with franchisees and the launch of differentiated products will drive BGF Retail's quantitative and qualitative growth."

Additionally, BGF Retail has continuously attempted to increase franchisees' profits through various products. It was the first in the industry to launch halal foods and vegan foods, and it continues to release differentiated foods linked to TV programs such as Gom-pyo Beer, a joint product with other industries, and convenience store restaurant and Matnam Square. Through this, it expands consumer choice and enhances attraction factors, simultaneously pursuing profits for both franchisees and headquarters.

BGF Retail is also leading the industry in environmental aspects. Following the industry's first introduction of paper straws in 2019, it was also the first to bring eco-friendly coffee beans. Moreover, it was the first in the industry to receive ISO14001 certification, an international standard environmental management system. Recently, to reduce plastic usage, it completely replaced existing plastic bags with biodegradable bags. These activities are being expanded not only at the headquarters level but also at the franchisee level.

This content was produced with the assistance of AI translation services.